Samsung Revs Up Efforts In Connected Car Space With $8B Deal For Harman

Samsung Monday said it plans to acquire connected car technology player Harman in an $8 billion deal, as the company looks to push its Internet of Things efforts into the fast lane.

The South Korean mobile giant said that Harman's leadership in connected car technologies – including infotainment systems, cybersecurity capabilities and telematics – would bolster its own connectivity technologies including 5G and display products.

’The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,’ said Samsung President and Chief Strategy Officer Young Sohn in a statement. ’We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow."

[Related: 20 Internet Of Things Products To Make Your Home Even Smarter]

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Samsung, which has also pledged to dish out $1.2 billion over the next four years for IoT-related research and startups, said the acquisition will give it access to Harman's 8,000 software designers and engineers who are "unlocking the potential of the IoT market."

The Stamford, Conn.-based company supplies car navigation services, embedded "infotainment" systems that offer information, entertainment and communication capabilities, as well as connectivity services.

Jay Gordon, vice president of sales at Enterprise Mobile, a Plano, Texas-based mobile solution provider, said that Samsung needs to catch up with vendors such as Google, Apple and Microsoft, which have also been tightening their focus on connected car technologies.

"Samsung needed to acquire technologies that are already embedded in vehicles," he said. "They lacked focus and progress in this area compared to their competitors. With an established footprint in vehicles, Samsung can sell additional integrated products to achieve a fully connected car, such as mobile devices, tablets, screens and other current and future offerings."

More vendors are looking at how they can tap into the connected car market, which market research Gartner says will "form a major element in the Internet of Things." Gartner predicts that by 2020 there will be a quarter--billion connected vehicles on the road, and these cars will include major functional areas of telematics, automated driving, infotainment and mobility services.

Samsung in 2015 established an Automotive Electronics Business Team to identify opportunities in the automotive sector. The company said this team will work closely with the Harman management team after the acquisition closes.

Harman also offers other connected car services, such as connected safety capabilities and a cybersecurity platform to secure hardware, provide operating system access control and protect networks. The company is also known for manufacturing lifestyle car audio systems, under brands such as JBL.

The transaction is expected to close in mid-2017, according to Samsung.